Wednesday March 25, 2015

As of April 2014, employment in the U.S. economy exceeded the 138.35 million jobs that existed when the recession began in December 2007. Employment in more than a third of the U.S. metropolitan areas, however, has yet to reach the same levels of employment they experienced in December 2007.

While national employment describes the recovery in aggregate, not all metropolitan statistical areas (MSAs) are recovering at the same pace. In Texas, for example, many MSAs dipped briefly below pre-recession levels before recovering and expanding, likely buoyed by oil production. The Washington, D.C. area also recovered fairly quickly, supported by federal stimulus money going to a relatively higher concentration of federal contractors in the region.

In contrast, no MSAs in Arizona have recovered to December 2007 employment levels, and conditions vary considerably in the state. The Phoenix area has added an average of 4,475 jobs each month (about 0.2% of total employment) over the last twelve months of available data; at that rate, the region could recover to December 2007 levels of employment in about seven months. The Tucson area has added an average of 317 jobs (about 0.9% of employment) monthly over the past year—but at that rate, it would take the region another four years or more to fully recover recession job losses.

While most of the largest metro areas have reached pre-recession levels of employment and continue to expand, the map shown below indicates that many MSAs are still waiting to get back to the employment levels that existed over seven years ago.

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Wednesday March 25, 2015

The internet has become a widely used source of data for regional labor market information, but that doesn't always mean it provides the level of detail needed to make reliable decisions.

Finding the required workers is at the top of the list of most growing businesses. For example, an expanding firm may require production workers. If this firm were to rely on an overall count of production workers to gauge the supply of skilled labor, it could miss badly since there are over 100 different types of production workers.

Just a few examples of production workers are electromechanical equipment assembles, food batch makers, and computer-controlled machine tool operators—all with vastly different skills. Wages vary as well for production occupations, from a high of $78,400 for nuclear power reactor operators to a low of $20,900 for pressers, textile, garment, and related materials workers (National average wages as of 2013).

Labor costs are also critical to ensuring that an expanding firm meets profitability goals. From that perspective, using the mean wage for an occupation to estimate overall labor costs may be misleading. For example, the mean wage for a tool and die maker in San Bernardino, California, is $50,500. However, entry-level workers in this occupation are typically paid $30,600 and experienced workers earn $60,500. Consequently, a firm could overestimate or underestimate labor costs if it assumes the mean wage instead of the RIGHT wage for the required workers.

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Monday March 9, 2015

These are the findings of Chmura Economics & Analytics in a study entitled “Estimating the Economic Loss of Daylight Saving Time for U.S. Metropolitan Statistical Areas” commissioned by the Carpenter Co. The study focused on only the aspects of economic losses where solid evidence from peer-reviewed academic journals could be obtained, showing how the DST change can lead to an increase in heart attacks, workplace injuries in the mining and construction sectors, and increased cyberloafing that reduces productivity for people who typically work in offices. A reasonable economic cost was then developed from the economic costs of heart attacks, workplace accidents and cyberloafing and applied to the more than 300 Metropolitan Statistical Areas (MSA) in the U.S.

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Monday March 2, 2015

The national unemployment rate continues to improve, but don’t tell that to people who are jobless and looking for work.

Many of today’s unemployed, particularly those who are younger, have a more negative view of the labor market.

Who’s right?

The official jobless rate in the nation peaked at 10 percent in October 2009, three months after the recovery began.

Over the past five years, it dropped considerably to 5.7 percent in January 2015.

Despite the large drop in the rate, there still is debate about the health of the U.S. labor market as some argue much of the decline is a result of people leaving the labor force rather than labor market improving.

The Labor Department publishes an alternative jobless rate - called the U6 unemployment rate - that includes people without work looking for full-time employment as well as those marginally attached to the labor force and those working part-time who would prefer to work full time.

The U6 unemployment rate remains high by historical standards. It stood at 11.3 percent in January 2015 — down from an all-time high of 17.1 percent in April 2010.

The Labor Department started collecting these statistics in 1994 and before the last national recession, the previous high of 11.8 percent was recorded in January 1994.

Based on an unemployment rate that includes the underemployed and discouraged workers, the labor market still has much room for improvement.

In addition to not including them, the official U.S. unemployment rate overstates the improvement in labor market conditions when the drop has been caused by those leaving the workforce.

The labor force participation rate, which represent the share of the civilian noninstitutional population that is in the labor force, stood at 66 percent in December 2007, the first month of the national recession.

As of January 2015, the labor force participation rate fell to 62.9 percent, hitting a 36-year low in the prior month.

While some have argued that the drop in labor force participation has been driven by demographic factors (such as baby boomers retiring), non-participation due to disability and increased school enrollment, among other factors, also have contributed to this decline.

Partly driving the decline are those in the 16-to-24-year age category whose labor force participation rate has decreased 7.3 percentage points from January 2003 to January 2015.

The labor force participation rate for those 55 years old and older has increased 4.5 percentage points over the same period, dispelling the argument that the drop is driven by retirees.

The bottom line is that five years into the current expansion, the labor market remains weaker than the official unemployment rate suggests.

Christine Chmura is CEO and Chief Economist at Chmura Economics & Analytics. She can be reached at (804) 649-3640 or receive e-mail at chris.chmura@chmuraecon.com.

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Monday February 16, 2015

Chmura is pleased to welcome Laura Leigh Savage as Director of Operations and Economic Development Specialist. Laura Leigh has worked with the Virginia Economic Development Partnership (VEDP) since 2004 in project management and business development roles for business attraction as well as business retention and expansion. In January 2015, she was recognized as one of North America’s top 50 economic developers by Consultant Connect. Prior to working with the VEDP, Laura Leigh spent 20 years in banking and commercial real estate financing followed by experience in a marketing consultant firm.

Laura Leigh brings a seasoned, real-world, and proven background as an economic development practitioner to Chmura’s seventeen years of experience working with economic developers through our consulting practice and technology solutions — JobsEQ and LaborEQ. You can contact Laura Leigh at LauraLeigh.Savage [at] chmuraecon.com.

With Laura Leigh’s addition to the firm, Leslie Peterson’s new role will be President, Chief Strategy Officer and Dr. Christine Chmura will be the Chief Executive Officer while remaining the firm’s Chief Economist.

Leslie’s new position will allow her to more fully utilize her 16 years of strategic planning and sales skills from the chemical industry as Chmura Economics & Analytics takes on a more prominent role in commercial real estate and site selection markets.

As CEO, Dr. Chmura will continue to lead the company in its vision to be the nation’s preferred provider of economic research, software, and data solutions. To this end, she will focus on researching important economic issues surrounding labor and regional growth, forecasting, and Department of Defense economic modeling.